Retailers like Net-a-Porter think they have found a way to give online shopping more of the feel of an outing at the mall or an hour with a catalog — by creating apps that resemble magazines for tablet computers. Just as magazine publishers are producing iPad apps that mimic print in a way they never could on ordinary Web sites, retailers are making iPad catalogs, with big, stylized photographs that users can flip through on the couch or in bed. And also like magazine publishers, they are adding rich features like video, sound and 3-D views.

With the evolution of Supercenters, Dollar, Specialty, and Limited Assortment stores, grocery retailers have added space to accommodate a plethora of services, enhanced the perimeter of their stores, and increased assortment in order to drive differentiation and fend off competitive pressures. Unfortunately, despite these efforts, grocery’s overall market share (of dollars) has declined by 49% (1988 – 90% to 2010 – 41%). Based on these trends, retailers now have too much square footage to support their businesses and are unsure what to do with the excess space.

Weis Markets, a 164-store grocery chain based in Sunbury, Penn., plans to optimize its overall in-stock position and reduce excess inventory and out-of-stocks in its stores, using Retalix's Demand-Driven Replenishment solution.

"We wanted a system that could provide demand-based forecasting and replenishment and assist us in optimizing our inventory. Retalix's Demand-Driven Replenishment solution was the ideal fit," said Bob Mawyer, vice president of information technology at Weis Markets. "In addition, we expect it to help us drive sales and improve our customer experience by reducing out-of-stocks, while making our operations more efficient and reducing overall costs."

Retalix's Demand-Driven Replenishment solution is part of the Retalix Merchandising Solution Suite. It is a demand forecasting and store replenishment system designed specifically for fast-moving consumer goods retailers, to optimize inventory management and positions, reduce out-of-stocks, streamline the order process, improve cashflow, and help retailers use resources more efficiently.

The Demand-Driven Replenishment solution is based on Microsoft technologies, and is comprised of four core modules: Demand Forecasting, Inventory Management, Order Optimization, and Analytics, and it contains advanced proprietary algorithms to interpret demand and optimize replenishment orders. Retailers using Demand-Driven Replenishment have reported significant out-of-stock reductions, decreased inventory levels and inventory costs, and lower spoilage of perishable products.

Technology is a major focus for Nordstrom this year according to Blake Nordstrom, president of Nordstrom. After installing Wi-Fi in all full line stores in November 2010, the retailer plans to deploy 6,000 handheld computers in these stores by July as well as make enhancements to its mobile and e-commerce channels.

"We should have roughly 5,000 to 6,000 handhelds in our full line stores by July," explains Nordstrom. "We will learn from these efforts and quickly add to this functionality with plans to have significantly more of these devices in our stores by year-end."

The retailer will also launch a mobile-optimized version of its e-commerce website in June that will allow customers to shop and make purchases from their smartphones.

Amazon edged out Walmart as the most-valuable retail brand by Millward Brown's accounting, with its brand value rising 37% to $37.6 billion as Walmart's fell 5% to $37.3 billion. Walmart parent Wal-Mart Stores still has more than 10 times the sales and more than five times the market capitalization of Amazon. But BrandZ's calculation subtracts tangible assets from market value to help estimate brand value. Amazon, with no physical stores, fares well in that process. The Walmart brand value also doesn't include Sam's Club or other overseas affiliates with different brand names owned by Wal-Mart Stores.

Even so, Amazon's rise, combined with declines in brand value not only for Walmart but also for other top global retailers Tesco and Carrefour last year, marks the shift toward e-commerce.

"Amazon benefits incredibly by having user reviews integrated into its site," said Eileen Campbell, global CEO of Millward Brown. "Everybody does that now, but Amazon was the first, so it's done an incredibly good job of building trust."

The problem of traditional retail is not competition. The challenges lie at home, within their business model. Though footfalls and phone calls haven't lessened much, profitability of mom-and-pop stores is hit by rising operating costs. They pay higher rent and wages but profit margins on various products have either shrunk or remain stable. Hoping for a surge in sales is unrealistic. Mom-and-pops target customers close to their location. This number is largely stable over five to ten years. Limited by capital, few can offer an exclusive deal or inventory that compels customers to drive long distances to shop at their store.

RSR Research's latest report, "Crystal Ball 2.0: The State of Retail Demand Forecasting, Benchmark 2011," RSR’s first annual benchmark on the topic, finds that retailers believe demand forecasting capabilities to be critical to their operations but struggle to incorporate demand forecasting insights deeper into their businesses.

These findings are based on a survey of 83 retailers between January-April 2011.

"Retailers have made significant investments in optimization technologies, particularly around price and labor, and demand forecasts come hand-in-hand with those capabilities,” said Brian Kilcourse, Managing Partner at RSR and a co-author of the report. “But the forecasting engines that create those inputs into optimization tools can often be completely different in terms of assumptions, time horizons, models. It adds sophistication to retailers’ capabilities, but also creates some challenging complications - building up internal siloes instead of knocking them down.”

"With more channels to manage and more leading indicators to demand, such as social media and consumer intent, retailers need all the help they can get in forecasting and managing demand," adds Nikki Baird, the report’s co-author. "The challenge isn’t that the crystal ball is cloudy but retailers just have too many forecast engines, each with a slightly different prediction than the next. Companies have yet to figure out how to reconcile them all."

"Crystal Ball 2.0: The State of Retail Demand Forecasting, Benchmark 2011" contains analysis of the business drivers, opportunities, and organizational constraints surrounding demand forecasts, as well as recommendations for creating successful demand forecasting capabilities. The report is part of RSR Research's ongoing efforts to provide market intelligence on retail technology trends, and can be downloaded here:

While Shop.Org had their Annual Summit in US, some of the top Indian Retailers & professionals gathered in Mumbai for India Retail Foru...

Disclaimer

The information in this weblog is provided "AS IS" with no warranties, and confers no rights. This weblog does not represent the thoughts, intentions, plans or strategies of my employer. It is solely my opinion. Inappropriate comments will be deleted at the authors discretion.